According to a recent press release, Bermuda Monetary Authority (BMA), a financial regulator of Bermuda has published regulation for cryptocurrency custodial services. It has also invited comments on the draft Code of Practice for Digital Asset Custody.
The Code of Practice aims to protect the public while unfolding the expectations of the authority regarding digital assets custody. 18th January 2019 is set as the last date of submitting feedback to BMA. Moad Fahmi, the Senior Adviser at BMA, explained that the Code of Practice would benefit the financial system of the country. He also said, “We remind stakeholders that the [regulatory] framework was built with the aim of making sure that the core objectives of financial regulation are respected, that is: protecting consumers, ensuring stability of our institutions and maintaining integrity and confidence in financial markets – with a focus on maintaining the highest standards of AML/ATF [Anti-Money Laundering/Anti-Terrorism Financing].”
The document gives a comprehensive idea for the digital assets custody which includes business management as well as technology issues like transaction handling, keys generation, and incident reporting. It was issued as Island’s effort to become a regulatory leader of digital assets as stated by Craig Swan, Managing Director of Supervision @ BMA. Another effort towards becoming a leader in the crypto sector included the amendment of the banking act to attract blockchain startups. These amendments were made after local financial institutions declined to offer banking services to the startups leveraging blockchain technologies.
David Burt, Bermuda’s premier explained that the government would not allow banks’ unwillingness to support blockchain companies. This could hamper the island’s efforts nurturing and supporting new companies such as distributed ledger technology. Bermuda also aimed to become one of the nations around the world to issue a framework of regulations for Initial Coin Offerings (ICO). Burt also said in March, “Bermuda has an opportunity to become a global leader in the Fintech space by being one of the first countries in the world to specifically regulate ICOs. The proposed regulatory framework will provide legal certainty to companies looking to conduct ICOs in Bermuda.”
Supporting and nurturing blockchain startups and providing a conducive environment to digital assets resulted in an incoming flow of investments in the island. Binance promised to invest up to $5 million in the blockchain startups in the country.